If I have a car loan, do I need full-coverage auto insurance?

Answered by Car Loans Expert Johnny on April 8, 2021

I don't want to pay more for auto insurance than necessary. Will I have to shell out for full coverage for my financed car?

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Johnny

Car Loans Expert

“Since the lender legally owns a financed vehicle, those who have a car loan must typically have full-coverage auto insurance. This protects the lender’s investment in the event of an accident.

Full-coverage insurance generally comprises comprehensive and collision coverages, as well as liability coverage, which is usually state-mandated. You may also want to consider buying gap insurance, which will cover the difference between what your car is currently worth and the amount you still owe on it in the event that the car is totaled. “


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